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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Vaibhavi D. Nanavati, J.
Sandip Dalpatbhai Kikani – Petitioner
Versus
Indian Oil Corporation – Respondent
R/Special Civil Application No. 10455 of 2021 With Civil Application (For Interim Relief) No. 1 of 2021
Decided On : 07-06-2022
Petitioner's dealership agreement with Respondent-Indian Oil Corporation Limited (IOCL) was terminated due to an alleged change in the K-factor of a dispensing unit without a corresponding certificate from the Weights and Measures Department (W&M). Petitioner challenged the termination order and the appellate order upholding it, arguing that the change in K-factor could have been a technical defect and that the authorities failed to consider the possibility of voltage fluctuation as the cause. The Court held that the authorities had considered all relevant factors, including the report of a committee constituted to investigate the matter, and that their conclusion was based on expert opinion and was not arbitrary or unreasonable. The Court also noted that the petitioner had an alternative remedy available through a pending civil suit and declined to exercise its extraordinary jurisdiction under Article 226/227 of the Constitution of India.
Fact of the Case:
Petitioner and Respondent-Indian Oil Corporation Limited (IOCL) entered into a dealership agreement for the sale of high-speed diesel and petrol. During an inspection by the Anti-Adulteration Cell (AAC), a change in the K-factor of a dispensing unit was observed, indicating possible tampering. The dealership agreement was subsequently terminated, and the petitioner challenged the termination order and the appellate order upholding it.
Finding of the Court:
The Court held that the authorities had considered all relevant factors, including the report of a committee constituted to investigate the matter, and that their conclusion was based on expert opinion and was not arbitrary or unreasonable. The Court also noted that the petitioner had an alternative remedy available through a pending civil suit and declined to exercise its extraordinary jurisdiction under Article 226/227 of the Constitution of India.
Issues: 1. Whether the change in K-factor was due to tampering or a technical defect. 2. Whether the authorities erred in not considering the possibility of voltage fluctuation as the cause of the change in K-factor. 3. Whether the petitioner had an alternative remedy available through a pending civil suit.
Ratio Decidendi: 1. The Court held that the authorities had considered all relevant factors, including the report of a committee constituted to investigate the matter, and that their conclusion was based on expert opinion and was not arbitrary or unreasonable. 2. The Court noted that the petitioner had failed to provide any evidence to support the contention that voltage fluctuation was the cause of the change in K-factor. 3. The Court held that the petitioner had an alternative remedy available through a pending civil suit and declined to exercise its extraordinary jurisdiction under Article 226/227 of the Constitution of India.
Final Decision: The Court dismissed the petition, holding that the authorities' decision to terminate the dealership agreement was not arbitrary or unreasonable and that the petitioner had an alternative remedy available through a pending civil suit.
JUDGMENT :
Issue Rule returnable forthwith. Mr. Munjaal M. Bhatt, learned counsel appearing waives services of notice of Rule on behalf of the respondents. 1. By way of the present petition under Article-226 of the Constitution of India, the petitioner herein has prayed for the following reliefs:
B. Your Lordships may further be pleased to issue a writ of certiorari and/or any other appropriate writ, order or direction in the nature of Certiorari quashing and setting aside the impugned Order No. DRP/IOC/RET/0004/2020, Dated:28/06/'21 and the Order No.RDO/R/5310, dated 18/01/’20 Annexure A & B holding it to be ex-facie illegal, arbitrary, capricious, perverse, and de-hors the Marketing Discipline Guidelines, 2012 and is liable to be quashed and set aside forthwith in the facts and circumstances of the case and in the interest of justice;
C. Pending the admission, hearing and final disposal of this petition, Your Lordships may be pleased to stay the execution, operation and implementation of the impugned order No. DRP/ IOC/RET/0004/2020, Dated:28/06/'21 to meet with the ends of justice;
D. Any other and further relief as thought fit may kindly be granted.”
2. The brief facts leading to the filing of the present petition are stated thus:
2.1. The petitioner and the respondent corporation entered into a dealership agreement on 25.02.2013, permitting the petitioner to run retail outlet for selling high-speed diesel and petrol at Village: Kunkavav, Dist.: Amreli for 15 years. It is stated that the dealership agreement firstly entered into between the respondent-Corporation and father of the petitioner – Shri Dalpatbhai Ghusabhai Kikani in the year 1994. After petitioner’s father expired on 21.08.2012, the dealership was entered into between the petitioner and respondent-corporation w.e.f. 25.02.2013.
2.2. On 13.05.2013, W & M department undertook the calibration work of the petitioner’s outlet and issued certificate No. 59 of even date. It is stated that the said certificate would be in force for a period of one year i.e. till 12.05.2014. The respondent – Corporation thoroughly inspected the dispensing unit on 11.07.2013 and 10.10.2013 and as per the checking report, the seal on nozzles and totalizer were found intact and the delivery of 5 Liters was also found Ok and within limit, accordingly, reports were issued.
2.3. On 04.12.2013, the Anti-Adulteration Cell (AAC) of the corporation inspected the dispensing unit of the petitioner. In the said inspection report dated 04.12.2013, the AAC found the seals on nozzle and totalier intact and also the delivery ok and within the limit and issued report on 04.12.2013. The report however recorded that the calibration was done on 22.05.2013 and that the K-factor was changed. Consequent thereto, it appears that the respondent corporation issued a fact finding/show cause notice dated 05.12.2013 to the petitioner calling upon the petitioner to explain about the e-calibration work dated 22.05.2013 qua the nozzle-A after Weight & Measures Department stamping and undertaking the work of calibration on 13.05.2013. It is stated that after the calibration work dated 13.05.2013 was done and the seals were put by the W & M Department, no such calibration was done at the instance of the petitioner. The seal was put by the respondent department on both the nozzles and the seal was also put on totaliser.
2.4. The petitioner replied to the show cause notice on 20.12.2013 clarifying the fact that the outlets were brand-new and installed before a week and that the petitioner was innocent and not played any role. The respondent corporation formed a committee of 5 members to investigate the cause of change in the K-factor. It appears that the committee had to undertake the calibration/hardware change/software change logs from the subject DU. It observed that there is no hardware or software change done to the DU from the date of installation. Th
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